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LESSER & KAPLIN, P.C. v. AMERICAN INS. CO.

October 12, 1989

LESSER & KAPLIN, P.C.
v.
THE AMERICAN INSURANCE COMPANY and RICHMOND REDEVELOPMENT AND HOUSING AUTHORITY



The opinion of the court was delivered by: WALDMAN

 JAY C. WALDMAN, UNITED STATES DISTRICT JUDGE

 I.

 Plaintiff Lesser & Kaplin, P.C. ("Lesser & Kaplin") initiated this action against defendants The American Insurance Company ("American") and The Richmond Redevelopment and Housing Authority ("the Authority") for payment of legal services. Presently before the court is defendants' motion to dismiss Count I of the three-count Complaint or, alternatively, to change venue pursuant to 28 U.S.C. § 1404. For the reasons set forth below, this case will be transferred to the United States District Court for the Eastern District of Virginia.

 II.

 Plaintiff, the law firm of Lesser & Kaplin, is a Pennsylvania professional corporation with its principal place of business in Blue Bell, Pennsylvania. Defendant American is a New Jersey corporation. Defendant Authority is a political subdivision of the Commonwealth of Virginia created pursuant to 6 Va. Code Ann. § 36-4 (Michie 1984) and operating within the City of Richmond, Virginia.

 In April 1985, American issued payment and performance bonds on behalf of Fletcher & Sons, Inc. ("Fletcher"), a Pennsylvania corporation, for the Richmond Exhibition Center Construction Project ("the Project"). Fletcher was the general contractor on the Project. The Authority was the owner.

 In the fall of 1986, two of the Project's subcontractors filed separate actions against Fletcher, as general contractor, and against American, as Fletcher's surety, in the United States District Court for the Eastern District of Virginia. In addition to asserting counterclaims, Fletcher and American filed a third-party complaint against the Authority in both lawsuits. Pursuant to certain agreements, Fletcher retained Lesser & Kaplin to represent both Fletcher and American in these lawsuits. This representation ended during the summer of 1987.

 In 1988, both of the Virginia lawsuits were settled, including an agreement that the Authority would pay substantial funds directly to American, as a creditor of Fletcher. The Authority subsequently paid the settlement proceeds to American.

 III.

 In its three-count Complaint, Lesser & Kaplin seeks to collect legal fees in the amount of $ 101,728.30 from American and the Authority. In Count I, Lesser & Kaplin alleges that the Authority and American are statutorily liable to pay them attorney's fees out of the settlement proceeds under Section 54-70 of the Virginia Code, which provides in relevant part:

 
Any person having or claiming a right of action sounding in tort, or for liquidated or unliquidated damages on contract, may contract with any attorney-at-law to prosecute the same, and such attorney shall have a lien upon such cause of action as security for his fees for any services rendered in relation to the cause of action or claim. And . . . any settlement or adjustment of such cause of action shall be void against the lien so created, except as proof of liability on such cause of action.

 Counts II and III of the Complaint are alternative counts based on contract and quasi-contract theories, respectively, against American only.

 Defendants claim that this court cannot exercise personal jurisdiction over the defendant Authority. Defendants further argue that, because the Authority is an indispensable party to this litigation, the court should dismiss Count I of the Complaint or, in the alternative, transfer the case to the Eastern District of Virginia ...


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